Sunak fears migration restrictions will impact tax cuts

Rishi Sunak ultimately announced a significant package of measures after official figures showed net migration reached 745,000 in a year. ending last December. Photo: James Manning/AFP

Rishi Sunak has shelved his crackdown on illegal migration after raising concerns that the budget watchdog would cut into his stockpile due to tax cuts, The Telegraph reports.

The Prime Minister was considering announcing measures to limit the arrival of foreign workers in the autumn, shortly after major announcements to cancel HS2 and cut the net zero target.

But The Telegraph can reveal that part of the reason Mr Sunak held out until December was fears that the Office for Budget Responsibility (OBR) would significantly reduce the government's margin of power — the discretion available to increase spending or cut taxes within its budget rules — ahead of the November autumn statement.

The OBR, created by George Osborne, provides an official «estimate» of the impact of policy changes, which it then uses to calculate the total headroom available to chancellors in the financial statements.

A Conservative party source said that ahead of the Autumn Statement, «the Prime Minister was concerned about the reduction in OBR stock as a result of further measures [to reduce migration].»

Jeremy Hunt, the chancellor, cut national insurance by 2p in November and faces pressure from the Tory party to further increase the spring budget.

Conservative MPs have criticized the OBR for focusing its «assessment» of migration policy largely on the benefits that extra labor brings to the economy, meaning that lower levels of net migration usually mean a smaller supply of opportunity.

Suella Braverman, the former home secretary, accused the OBR of largely “ignoring” the costs of increased migration due to increased pressure on the NHS, schools and housing market.

Mr Sunak finally announced a significant package of measures after official figures showed net migration in the year to December last year reached 745,000 — three times pre-Brexit levels — despite the Tories' manifesto pledge reduce the overall level of migration.

Changes included raising the minimum wage that migrants must earn in skilled work by a third. However, the Prime Minister faces scandal after easing measures to raise thresholds for partners.

Robert Jenrick, the former immigration secretary, is believed to be preparing to draw up a plan to deliver on the Conservative manifesto commitments on the basis that he believes the government's current plans will fall short of that goal.

Source Number 10 said that by waiting for new net migration data to be released at the end of November, the government was able to put together the «best package» based on the «full picture» and «targeting the right areas to have the biggest impact».

The source added: “We have finally announced a plan that will deliver the biggest reduction in net migration in history.”

An OBR spokesman said: “These changes have been announced since [our] last forecast was published in November, so we have not yet carried out any analysis of the impact of these measures.

“Our long-term forecasts take into account migration and other demographic trends when assessing demand for public services.”

Meanwhile, Reform UK, The «net zero migration» party is preparing to field candidates in all constituencies in England, Scotland and Wales, the Sunday Times reports.